Freshpet (FRPT) shares surged 5.15% in pre-market trading on Monday following the release of its second-quarter 2025 financial results, which showcased significant improvements in profitability despite slightly missing revenue expectations.

The pet food maker reported a strong turnaround in its bottom line, with Q2 net income reaching $16.4 million, compared to a net loss of $1.7 million in the same period last year. Earnings per share came in at $0.33, substantially beating analyst expectations of $0.16. This marked a significant improvement from the $0.03 loss per share reported in Q2 2024.

While Freshpet's Q2 net sales rose 12.5% year-over-year to $264.7 million, it fell short of the consensus estimate of $268 million. The company attributed the growth to volume gains of 10.8% and favorable price/mix of 1.7%. Despite the revenue miss, Freshpet demonstrated strong operational efficiency, with adjusted gross margin improving to 46.9% from 45.9% in the prior year period.

However, citing a challenging consumer sentiment backdrop, Freshpet lowered its full-year 2025 net sales growth guidance to 13-16%, down from the previous outlook of 15-18%. The company also reduced its 2025 capital expenditures guidance to approximately $175 million, from the earlier projection of $225 million. Notably, Freshpet removed its long-term $1.8 billion net sales target for 2027, acknowledging recent slower growth trends.

Despite these cautionary notes, investors seem encouraged by Freshpet's improved profitability and operational efficiencies. The company maintained its 2025 Adjusted EBITDA guidance at $190 million to $210 million, signaling confidence in its ability to manage costs effectively even in a challenging economic environment.